Individualism and bank financial structure similarity

We use a sample of 75 countries to conduct the first international study of national culture on bank financial structure similarity. We construct a novel and comprehensive measure of bank financial structure similarity using banks’ financial statement data. Our empirical results show that individualism is robustly and positively associated with bank financial structure similarity, holding bank-pair levels, bank levels, and country levels equal. We find that other cultural dimensions, such as power distance, uncertainty avoidance, masculinity, and long-term orientation, have little effect on similarity. Our work also shows that financial structure similarity is correlated with higher bank risk.